Copy of my letter to the Rugby Observer (not published)
As we contemplate the publication of the Independent Commission on Banking this week, we should reflect on the double-whammy suffered by 'ordinary' people. Despite the financial crisis not having been of their making, they are both being required to fund the bailouts through and also suffer the most as a result of the cuts to services and tax rises. As the Institute for Fiscal Studies (which is respected by the Government) says in its study today, living standards for families will be down 10% and the poorest will suffer most from the austerity measures brought in by George Osborne.
Throughout all this, the Government has shown a willingness to offer largesse to the banking sector. In addition to huge taxpayer-funded bailouts, the Government, via the Bank of England, has printed £200bn through Quantitative Easing. This was done, we are told, to encourage them to lend into the 'real' economy. They are not doing so. What is required now is not more of the same, but what I've termed Citizens' Quantitative Easing, which directly benefits ordinary people, doing ordinary jobs, creating real and socially productive economic activity. Citizens' QE, could comprise the issuing of a £200 voucher to all over the age of 18 which would be time-limited; non-transferable; non-cashable by the recipient; and limited to the purchase of certain goods and importantly, services from SMEs rather than large corporations.
The money used to cash the vouchers would be created, or 'printed' by the Government, and as such would not require further borrowing. On ONS population figures, such system would cost £9.6bn - small change compared with the hundreds of billions of taxpayers' money already spent propping up the banks. Critics will argue that such a move would be inflationary. It is more likely that the powers that be do not want to let the cat out of the bag that the kind of state intervention done in an instant for the City can actually be replicated on behalf of ordinary citizens. Were such news to leak out, who knows what citizens might demand.
John Slinger (Labour Party member and Editor of Pragmatic Radicalism: Ideas from Labour's New
Generation - http://pragmaticradicalism.co.